Initial jobless claims for the week ending May 15 fell to 444,000, a post-pandemic low, as a number of Republican states are now cutting off a $300 per week federal unemployment boost in the face of what some say is a labor shortage.
The number was lower than an expected 450,000 and 34,000 lower than the previous week’s adjusted 478,000.
It was the lowest level since March 14, 2020 for the fourth week in a row, showing that fewer employers are cutting jobs as the pandemic slows and states continue to loosen restrictions.
It is a good sign for the economy, which had several pieces of bad news last week when more than 7oo,ooo fewer jobs were reported added to the economy than expected and inflation rates hit at least 13-year highs.
Continuing umemployment numbers higher
The news wasn’t as good for continuing unemployment claims, however, which were 3.751 million when they were expected to be the same as last week’s, which was 3.64 million.
The unemployment rate actually rose to 6.1% on the news, rather than dropping to 5.8% as forecasted.
For unemployment to rise when there are a reported 8.1 million job openings nationwide shows the impact of the continuing unemployment boost on hiring. While the additional weekly amount has been cut down to $300 per week, that could still amount to more than the $15 per hour employees might make taking an entry level job.
Bank of America analyzed data pertaining to unemployment and found that workers who were making up to $32,000 could still get more on unemployment than they could while working.
Paying people not to work is having a disastrous effect on many businesses, who need to hire workers in order to resume pre-pandemic operations. Many businesses have had to cut hours or cut production on products because they lack the staff to operate as they would like.
States cutting off federal unemployment boost
At least 21 Republican-led states have now said they will end the federal unemployment boost earlier than the latest COVID-relief package specifies in order to encourage recipients to go back to work.
Most of the states will end the relief in June or July, giving people three to six weeks to find work again. A few states like Arizona are giving bonuses to people who go back to work in an attempt to encourage work and discourage taking advantage of the system.
The total number of workers that will be impacted by the loss of federal unemployment benefits is expected to be about 895,000. Some of these might be parents of young children who have not been in school and day care during the pandemic, which has also held back some from returning to work.
States are also reinstituting rules about showing that you have applied for jobs that were suspended during the pandemic, and President Joe Biden made it clear that if a worker is offered a suitable job, they cannot turn it down and continue to receive benefits.